RECESSION: Estate agents’ fears of drop in prices of property isn’t over

Consumer Real estate agents from all walks of life complain bitterly about the increasing economic hardship in the country and it how it affects property market.

By Okafor Joseph | March 13, 2017 @ 0:00 GMT |

Several agents and developers who spoke with Naija247news explained that the continues decline in property market was seriously affected by the economic downturn, leading to biggest drop in the prices being offered by potential buyers and sellers.

Mr. Okafor Paul A Lagos based Real Estate developer said there is a lull in the market because the cost of production has increased.

He said people still build houses for lease and sales despite how doubled the prices of raw materials currently in the market while the cost of workmanship remained stable.

Mr. Okafor, Estate developer at Amuwo Odofin, stated that the purchasing value has drop completely. In 2014/2015 a three bedroom flat is being rented for N1.5million in Amuwo Odofin is now N900, 000. A standard Duplex formally place at the rate of 3.5million is reduced to 2million or even 1.8million, currently a quality 2bedroom flat is now place for rent at the rate of N400, 000, formally placed for N800,000 at Liverpool estate Satellites town; and a room self contain drop from N250, 000 to N150, 000. He however expressed optimism hoping that the market situation will change in the first quarter of this year. Although the economy shrank in the first three quarters of 2016 and Nigeria’s inflation rate is the highest in over a decade, yet people are still buying property, building houses and carrying out projects but the cost of construction has doubled in some cases.

“The only thing that has been stable a bit is the labour wages. We hope that the momentum will improve in the first quarter of 2017,” he said.

Mr. Okafor, further explained the economic recession period as the ‘choice’ time for buyers to bid for property, stressing that many property owners dispose their asset at lower prices at this time. He noted that all this is cause by the falling crude oil prices, militant attacks on oil pipelines and foreign-exchange shortages began contracting.

The CEO of Lords Properly further disclosed that he can no longer make ends meet at a time when the inflation rate is at the highest in more than a decade. Prices of imports from food to gasoline climbed as the naira lost about 40 percent of its value against the dollar after the central bank removed a currency peg in June. The regulator continues to block importers of items it deems non-essential from the official foreign-exchange market, forcing them to buy dollars on the black market where the currency is about 30 percent more expensive.

Currently the statistics agency issues a report probably showing the economy contracted last year for the first time in a quarter century. Gross domestic product contracted year-on-year in the first three quarters of last year. The statistics agency report will probably show the economy shrank 1.5 percent in the last three months, according to the median estimate of nine economists surveyed by Bloomberg. The International Monetary Fund forecast a 1.5 percent contraction for 2016.MANY SELLERS, FEW BUYERS

He groans that there were few buyers for the numerous property being put up for sale and lease.

Mr. Emmanuel Jose, a Lagos based estate agent, the property market in Nigeria currently is Loaded by numerous sellers and few or no corresponding buyers. Mr. Jose in a chart with Lensng reveals that the disparity in the demand and supply rates is the cause of reduction in prices because buyers are only willing to pay less for properties.

“Most residential and commercial properties are all up for consumption; either to let or for sale. But there is no purchasing power to go after them. Of course, this has drastically reduced the prices of properties in the market and with continues economy recession bites property continue to decline.

A civil servant at the State teaching hospital , Lagos , who declined to have his name in print, also stated that the poor situation of things is why there are many unoccupied buildings in some parts of the city. She explained further that many politicians and government officials are being forced to put up their property for sale at ridiculous prices.

For Mr. Ifeanyi chukuwdi, A Lagos based estate agent he explained here in Lagos property business has decreased totally with current economic crisis in fact landlords are reducing the prices of new build houses just to keep the business going pending when the economics is over.

Thompson Olowookere, an estate agent based in Ilorin, said owners of property are putting them up for sale at this period. He also complained of low patronage as there are very few buyers. While expressing hope that the situation would improve in the new year, Mr. Olowookere said it has not been easy surviving as an estate agent in the period of recession.

Mr. Olowookere also stated that the

senior vice president at Teneo Intelligence in London, said by phone. “Ordinary Nigerians have been hit very badly.” And Budget Delay, property business declining seriously and investors relocating to nearby Africa countries while President Muhammadu Buhari just arrived the country after long holidays in London since Jan. 19 stating that he needs more rest almost handing over duties to his vice President as he seeks for more rest for an undisclosed sickness.